Viking Mines Limited
(formerly Viking Ashanti Limited)
ABN 38 126 200 280
Annual report
for the year ended 30 June 2014
Viking Mines Limited
ABN 38 126 200 280
CONTENTS
Corporate information
Operations report
Directors’ report
Auditor’s independence declaration
Corporate governance report
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors’ declaration
Independent auditor’s report to the members
ASX additional information
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Viking Mines Limited
ABN 38 126 200 280
CORPORATE INFORMATION
Directors
Executive Chairman: John (Jack) Gardner
Managing Director: Peter McMickan
Non-Executive Director: Trygve Kroepelien
Company secretary
Michael Langoulant
Registered office
Suite 2, Level 1, 47 Havelock Street
West Perth WA 6005
Website www.vikingmines.com Email: info@vikingmines.com
Ph: (61-8) 6313 5151
Fax (61-8) 9322 8892
Share registry
Computershare Investor Services Pty Limited
Level 2, 45 St Georges Terrace
Perth WA 6000
Email: web.queries@computershare.com.au
Ph: 1 300 557 010
Fax: (08) 9323 2033
Solicitor
Jackson MacDonald
Level 25, 140 St Georges Terrace
Perth WA 6000
Auditor
Rothsay Chartered Accountants
Level 1, Lincoln Building
4 Ventnor Avenue
West Perth WA 6005
Stock Exchange Listing
Australian Securities Exchange (ASX code: VKA)
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Viking Mines Limited
ABN 38 126 200 280
OPERATIONS REPORT
Highlights
Takeover of emerging coal producer Auminco Mines Limited proceeding
Four Memoranda of Understanding for potential coal off-take signed, and new Indicated and Inferred
38.2Mt JORC (2012) resource estimate for Auminco’s Berkh Uul bituminous coal project in Mongolia
12% increase announced to Inferred JORC (2012) mineral resource estimate to 20.6 Mt @ 1.2 g/t Au for
790,000 ounces of contained gold for the Akoase East gold project in Ghana
Auminco Merger
During the year Viking completed a number of reviews of projects and companies which were considered
complimentary to the Company’s strategic objectives, culminating in Viking launching a recommended takeover bid for
all the shares in the unlisted Sydney-based emerging coal producer, Auminco Mines Limited (Auminco). Viking issued
its Bidder's Statement in April 2014 and, as at the date of this report, Viking had received acceptances from Auminco
shareholders totalling 97.69% of Auminco. Viking has since the year end declared its takeover bid unconditional with
the takeover offer period to end on 24 September 2014.
The takeover will see Viking acquire 100% of the Auminco shares and options by the issue of:
81,000,000 Viking Mines shares;
27,000,000 million unlisted Viking Mines options exercisable at A$0.12 for a term of 30 months from merger
completion; and
3,000,000 unlisted Viking Mines options exercisable at A$0.20 on or before 15 November 2016.
In August 2014 the Company issued a prospectus to raise up to $3.04 million by the issue of up to 80 million shares at
an issue price of $0.038, together with a free option exercisable at $0.09 at any time before 30 April 2017, for every 4
shares subscribed for. On 25 August 2014 the Company announced that the minimum subscription level of $2.09
million had been raised under this prospectus.
The proposed post-merger Board will comprise four members with existing Viking Mines Directors, Mr Jack Gardner
and Mr Peter McMickan remaining as Chairman and Executive Director respectively. Auminco’s Mr Andrew Whitten
will join the Board as Non-Executive Deputy Chairman while Mr Matt Morgan will become Managing Director. Mr
Bayar Tsagdaa will act as an alternate for Mr Andrew Whitten.
The Viking Mines Board believes that the consolidated company will provide improved shareholder value to both
Viking Mines and Auminco through:
addition of a portfolio of highly prospective coal projects, particularly the Berkh Uul bituminous coal project,
that provide the opportunity for near-term project development, mining and cash flow;
diversity across two country jurisdictions and multiple commodities, allowing for exploration activity and
potential news flow on a year round basis;
improved access to funding;
strengthened share register;
greater market liquidity, and a
broad range of complementary skill sets at Board and management level.
On completion, this will be a transforming transaction for Viking Mines allowing the Company to achieve its strategic
objective of acquiring near-term production assets with potential to deliver sustainable cash flows for in excess of 15
years with substantial exploration upside.
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Viking Mines Limited
ABN 38 126 200 280
Auminco Projects
Auminco is a Sydney based coal developer with two high quality strategically located coal projects in Mongolia (Figure
1).
There is near term production potential from the Berkh Uul bituminous coal project, located near the Russian border,
rail infrastructure and potential off-take customers.
The Khonkhor Zag anthracitic coal project is located on a granted 30 year mining lease close to China’s border with
only 1.2 km of the 4 km strike explored by drilling.
Further upside potential exists through Auminco’s portfolio of additional coal and base metals projects in Mongolia.
Figure 1: Auminco Mines Project Locations, Mongolia
Berkh Uul Coal Project – Mongolia (Auminco 100%)
Berkh Uul is located 400 km north of Ulaanbaatar in northern Mongolia within the Orkhon-Selege coal district and
within 20km of the Russian border. The project is within 40km of rail access into Russian off-take markets, in close
proximity to water, infrastructure and transport.
The deposit consists of shallow, consistent coal seams of high quality bituminous coal amenable to open pit mining.
Auminco’s discussions with nearby cement works and power stations confirm a local industrial demand for unwashed
Berkh Uul coal, due to its low ash and relatively high calorific value. This has been evidenced by the signing of four
non-binding MOU’s with the following entities:
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Viking Mines Limited
ABN 38 126 200 280
Darkhan Thermal Power Plant - a major supplier of electricity to Mongolia’s second largest city, the
commercial and industrial centre of Darkhan, and the northern region of Mongolia. This plant is being
upgraded with coal consumption to increase from approximately 400,000t per year to approximately 600,000t
per year
Erdenet Power Plant - a major supplier of electricity to the Erdenet copper mine, located 180km west of
Darkhan City. The plant consumes approximately 250,000t of coal per year
Darkhan Metallurgical Plant - located close to Darkhan City, it is expanding its current 100,000 tpa steel
milling capacity. This expansion is due for completion in 2015.
Khutul Cement and Lime Plant, Mongolia’s largest cement manufacturer, located approximately 60km west of
Darkhan City, has plans to expand its coal consumption from the current 250,000 t per year to around 400,000t
to 500,000 t per year to meet growing domestic demand for its cement products.
The MOU’s, signed with Auminco’s Mongolian subsidiary BRX LLC state these entities intent to enter into future
purchase agreements for Berkh Uul project coal, and establishes testing of a bulk sample as a basis for technical
evaluation of the coal.
A new Indicated and Inferred coal resource estimate, classified in accordance with the JORC (2012) Code, for the
Berkh Uul coal project was completed during the year. The resource estimate was completed for Auminco by
consultancy group, RungePincockMinarco Ltd, and totals 38.3 Mt. Of this, 21.4Mt is classified as Indicated and 16.9Mt
classified as Inferred (Table 1). The coal is bituminous in rank (ASTM classification) with average in situ quality as
follows: Total Moisture 19.8%, Calorific Value 5,323 kcal/kg (air dried basis, adb), Ash 15.5% (adb), and Total
Sulphur 0.37% (adb) (Table 2).
Table 1: Berkh Uul Indicated and Inferred Resource Estimate (February 2014)
Berkh Uul JORC (2012) Coal Resource (million tonnes in situ)
Resource type
Seam
Open Cut
Underground
1
2
OC subtotal
1
2
UG subtotal
Grand Total
Measured
_
_
_
_
_
_
_
Indicated
Inferred
Total
4.4
2.6
7.0
8.2
6.2
14.4
21.4
3.5
0.3
3.9
8.3
4.8
13.1
16.9
7.9
3.0
10.9
16.5
10.9
27.4
38.3
Sum of columns may not equal the total due to rounding
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Viking Mines Limited
ABN 38 126 200 280
Table 2: Berkh Uul JORC (2012) Coal Resource Quality
Berkh Uul JORC (2012) Coal Resource Quality
Resource
type
category
Seam
Open Cut
Ind
Inf
1
2
subtotal
1
2
subtotal
TM
(%)
20.8
21.0
20.9
18.9
20.9
19.1
IM
(%)
13.5
13.7
13.6
12.0
13.8
12.1
Ash
(%
adb)
14.4
9.8
12.7
20.1
10.0
19.2
VM
(%
adb)
32.6
34.9
33.4
30.9
34.5
31.2
FC
(%
adb)
39.5
41.6
40.3
37.1
41.7
37.5
TS (%
adb)
CV
(kcal/kg
adb)
0.34
0.35
0.34
0.37
0.37
0.37
5373
5693
5493
5011
5684
5066
Rdis
1.35
1.31
1.33
1.39
1.32
1.38
OC subtotal
20.3
13.1
15.0
32.6
39.3
0.35
5342
1.35
Underground
Ind
Inf
1
2
subtotal
1
2
18.9
20.9
19.7
18.7
21
subtotal
19.6
12.2
13.7
12.8
12.0
13.8
12.6
18.8
10.3
15.2
19.6
10.6
16.3
31.3
33.9
32.4
31.0
33.8
32.0
37.8
42.0
39.6
37.4
41.8
39.0
0.34
0.42
0.37
0.35
0.43
0.38
5110
5681
5355
5050
5657
5272
1.38
1.32
1.35
1.39
1.32
1.36
UG subtotal
19.6
12.7
15.7
32.2
39.3
0.38
5313
1.36
Grand Total
39.3
Sum of columns may not equal the total due to rounding
32.3
19.8
12.8
15.5
0.37
5323
1.35
Note: Air Dried Basis(adb); TM- total Moisture; IM-Inherent Moisture; VM-Volatile Matter; FC – Fixed Carbon; TS-
Total Sulphur; CV- Calorific Value; Rdis- in situ Relative Density.
The principal author of the Berkh Uul resource estimate and associated report is Mr Brendan Stats, who is a
professional geologist with over 10 years’ experience in mining and mineral resource estimation. Mr Stats is a Senior
Geologist of RungePincockMinarco Pty Ltd and a Member of the Australasian Institute of Mining and Metallurgy
member number 311313.
Mr Stats is responsible for the Berkh Uul resource estimation and has sufficient experience that is relevant to the style
of mineralisation and type of deposit under consideration and for the activity to report a mineral resource, to qualify as a
Competent Person as defined in the Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore reserves, The JORC Code, 2012 edition.
Under the JORC Code (2012), Clause 9, and ASX Listing Rules 5.6, 5.22 and 5.24, consent has been sought and
obtained from all Competent Persons listed above for any initial public release of information related to this resource
estimate and associated report.
The information in this Report concerning the Mineral Resources of Auminco is extracted from Viking’s announcement
to the ASX entitled “New 38.3Mt resource for Merger Company’s Mongolian coal project” dated 17 March, 2014, and
is available to view on Viking’s website at www.vikingmines.com. Viking confirms that it is not aware of any new
information or data that materially affects the information included in the original market announcement and, in the
case of estimates of Mineral Resources that all material assumptions and technical parameters underpinning the
estimates in the relevant market announcement continue to apply and have not materially changed. Viking confirms that
the form and context in which the Competent Person’s findings are presented have not been materially modified from
the original market announcement.
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Viking Mines Limited
ABN 38 126 200 280
Khonkhor Zag Coal Project – Mongolia (Auminco 100%)
Khonkor Zag is an anthracitic coal project located 1,400km southwest of Ulaanbaatar in Western Mongolia. It is
strategically located within 40km of China’s Burgastai border port (Figure 1) with an existing haul road adjoining the
tenement.
The current mining licence was granted to Auminco’s subsidiary in April, 2013, for a period of 30 years.
A total of 42 drill holes over 1.2 strike km have been completed on the tenement, with further drilling planned to
increase the deposit size for a JORC resource estimate. This drilling, combined with historical mining on the
outcropping coal seams, indicates clear potential for open pit mining.
Excellent scope exists to develop a low cost, high margin premium coal project close to Chinese markets.
Viking Projects
The Viking Mines mineral licences are located in southern Ghana, West Africa (Figure 2) in one of the most strongly
gold endowed and tightly held geological provinces in the world, the Ashanti Gold Belt. Numerous multi-million ounce
gold deposits are located within and on the margins of the Ashanti Gold Belt, including two of the largest gold deposits
in the world, Obuasi and Tarkwa.
Viking holds more than 224 sq km of ground in two project areas; Akoase and West Star/Blue River. The most
advanced prospect, Akoase East hosts a significant near surface JORC (2012) classified Inferred resource of 790,000 oz
of gold (Table 3).
Figure 2: Project Locations in Southern Ghana
Akoase Gold Project – Ghana (Viking 100%)
The Akoase project is located approximately 125km north-northwest of Accra in southern Ghana (Figure 2), with sealed
road access within 5km and grid power within 10km of the project area.
The Akoase prospecting licences are 100% owned by Viking Mines and cover 97km2 in the northern part of the Ashanti
gold belt. A number of major gold mines and projects are located within this belt, including Newmont’s 8.7 million
ounce Akyem gold project which is approximately 25km southwest of the Akoase project area.
Akoase East
An updated Inferred mineral resource estimate, classified in accordance with the JORC (2012) Code, of 20.6 Mt @ 1.2
g/t Au for 790,000 ounces of contained gold, at a 0.5 g/t Au cut-off was completed for the Akoase East deposit during
the year (Figure 3).
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Viking Mines Limited
ABN 38 126 200 280
The updated resource estimate was completed by internationally recognized consultancy GHD Pty Ltd in Brisbane, and
represents a 12% increase in contained ounces compared to the previous March 2012 reported Inferred resource of
704,000 ounces, also at a 0.5 g/t Au cut-off.
The updated resource model has extended the resource 700 metres to the northeast, outlining multiple sub-parallel zones
of mineralization over a strike length of 3.5km, from surface to an average depth of 130 metres. The Akoase East
deposit remains open at depth, and along strike to the northeast.
The resource model has also confirmed that higher grade mineralization is best developed in the area of Akoase East’s
Alimac prospect, where the thickest and highest grade drill intercepts have previously been reported.
The new resource estimate is based on geological, drilling and assay information up to the end of August 2013. It
includes approximately 10,000 metres of historical Reverse Circulation (RC) drilling data, plus data from
approximately 10,000 metres of RC and 3,000 metres of diamond drilling completed by Viking over the past four years.
The Akoase East resource is reported at various cut-off grades, and by weathering type in the Mineral Resources
Statement below in Table 3.
Figure 3: Akoase East Geology
West Star/Blue River Joint Venture Project - Ghana (Viking 100% hard rock rights)
The West Star/Blue River project is located approximately 185km west of Accra (Figure 1), with sealed road access
within 5km and grid power within 10km of the project area. No field activity was undertaken during the year.
The West Star and Blue River properties are subject to joint venture agreements with local Ghanaian companies, where
Viking has earned 100% of the rights to all hard rock gold mineralization. The joint venture partners retain rights to the
alluvial gold mineralisation on the licences.
The licences are located in the southern part of the Ashanti gold belt and cover an area of 127km2. Our licences adjoin
Endeavour Mining’s 2 million ounce Nzema gold mine, which is approximately 7km southwest of the West Star/Blue
River project (Figure 4).
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Viking Mines Limited
ABN 38 126 200 280
Figure 4: West Star/Blue River Geology
Corporate
On 20 December 2013 the Company announced that it had placed 22,537,645 ordinary shares at A$0.035 to raise
$788,818, before costs.
During 2014-2015 the Company plans to complete the Auminco merger, progress the Akoase gold project, to actively
pursuing operational and corporate opportunities which are complementary to the existing asset portfolio, and continue
to pursue an active program of investor and broker presentations in Australia.
Mineral Resources Statement
The Mineral Resources statement for the Company, as at 30 June 2014 is summarized below:
10
Viking Mines Limited
ABN 38 126 200 280
Akoase Gold Project, southern Ghana, Viking 100% ownership
The Akoase East resource has been independently estimated by internationally recognized and qualified resource
consultancy GHD Pty Ltd in accordance with the JORC (2012) Code.
Table 3: Akoase East Inferred Resource Estimate (September 2013)
TOTAL
Cut off (g/t Au)
0.4
0.5
0.75
1.0
BY WEATHERING TYPE
Oxide
Cut off (g/t Au)
0.4
0.5
0.75
1.0
Fresh
Cut off (g/t Au)
0.4
0.5
0.75
1.0
Million tonnes
21.6
20.6
16.9
12.0
Million tonnes
5.9
5.7
4.6
3.2
Million tonnes
15.6
14.8
12.3
8.7
Au g/t
1.2
1.2
1.3
1.5
Au g/t
1.2
1.2
1.3
1.5
Au g/t
1.2
1.2
1.3
1.5
Oz Au (x 1,000)
800
790
710
570
Oz Au (x 1,000)
220
217
194
156
Oz Au (x 1,000)
581
570
518
417
Ordinary Kriging whole block estimates using 25mE x 25mN x 10mRL parent block dimensions. Reported using gold
(Au) lower cut-off grades (preferred cut-off is 0.5 g/t Au). Using rounded figures in accordance with the Australian
JORC Code (2012) guidance on Mineral Resource Reporting.
The previous JORC (2004) classified Inferred mineral resource estimate for the Akoase East deposit was completed in
March 2012 and was 18.0 Mt @ 1.2 g/t Au for 704,000 ounces of contained gold, at a 0.5 g/t Au cut-off.
The principal author of the Akoase East resource estimate and associated report is Mr Doug Corley, who is a
professional geologist with over 20 years’ experience in mining and mineral resource estimation. Mr Corley is a
Principal Resource Geologist of GHD Pty Ltd and a Member of the Australian Institute of Geoscientists (AIG) and is a
Registered Professional Geoscientist (R.P.Geo.), accredited in the field of mining, registration number 10,109.
Mr Corley is responsible for the Akoase East resource estimation and has sufficient experience that is relevant to the
style of mineralisation and type of deposit under consideration and for the activity to report a mineral resource, to
qualify as a Competent Person as defined in the Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore reserves, The JORC Code, 2012 edition.
Ms Lenore Jepsen is a professional geologist with over 15 years’ experience in the field of mining and database
validation. Ms Jepsen is a member of the AIG and the Australasian Institute of Mining and Metallurgy (Aus IMM). Ms
Jepsen is an employee of Maxwell Geoservices and is responsible and Competent Person for the Akoase East drillhole
database (including collar, assay, down-hole survey and QA/QC validation) information.
Under the JORC Code (2012), Clause 9, and ASX Listing Rules 5.6, 5.22 and 5.24, consent has been sought and
obtained from all Competent Persons listed above for any initial public release of information related to this resource
estimate and associated report.
The information in this report concerning the Akoase East Mineral Resource of Viking Mines is extracted from the
report entitled “12% Increase to 790,000 oz in Gold Resource for Ghana Project” created on 4 October 2013 and is
available to view on Viking Mines website at www.vikingmines.com. Viking Mines confirms that it is not aware of any
new information or data that materially affects the information included in the original market announcement and, in the
case of estimates of Mineral Resources or Ore Reserves that all material assumptions and technical parameters
underpinning the estimates in the relevant market announcement continue to apply and have not materially changed.
Viking Mines confirms that the form and context in which the Competent Person’s findings are presented have not been
materially modified from the original market announcement.
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Viking Mines Limited
ABN 38 126 200 280
Peter McMickan
Managing Director
Competent Persons Statement: The information in this Public Report that relates to Exploration Results of Viking Mines Limited is
based on information compiled by Mr Peter McMickan, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr
McMickan is a full time employee of Viking Mines Limited. Mr McMickan has sufficient experience that is relevant to the style of
mineralization and type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as
defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr
McMickan consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
The information in this Public Report that relates to the Akoase East gold resource of Viking Mines Limited is based on information
compiled by Mr Doug Corley, who is a Member of the Australian Institute of Geoscientists. Mr Stats is a full time employee of GHD
Pty Ltd. Mr Corley has sufficient experience that is relevant to the style of mineralization and type of deposit under consideration and
to the activity that he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Corley consents to the inclusion in this presentation of
the matters based on his information in the form and context in which it appears.
The information in this Public Report that relates to the Exploration Results of Auminco Mines Limited is based on information
compiled by Mr Matt Morgan, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Morgan is a full time
employee of Auminco Mines Ltd. Mr Morgan has sufficient experience that is relevant to the style of mineralization and type of
deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as defined in the 2012 Edition
of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Morgan consents to the
inclusion in this presentation of the matters based on his information in the form and context in which it appears.
The information in this Public Report that relates to the Berkh Uul Coal Resource and Exploration Target of Auminco Mines Limited
is based on information compiled by Mr Brendan Stats, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr
Stats is a full time employee of RungePincockMinarco Ltd. Mr Stats has sufficient experience that is relevant to the style of
mineralization and type of deposit under consideration and to the activity that he is undertaking to qualify as a Competent Person as
defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr
Stats consents to the inclusion in this presentation of the matters based on his information in the form and context in which it appears.
Forward Looking Statements: This document may include forward looking statements. Forward looking statements may include,
but are not limited to statements concerning Viking Ashanti Limited’s planned exploration programs and other statements that are not
historical facts. When used in this document, words such as “could”, “plan”, “estimate”, “expect”, “intend”, “may”, “potential”,
“should”, and similar expressions are forward looking statements. Although Viking Ashanti Limited believes that its expectations
reflected in these forward looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be
given that actual results will be consistent with these forward looking statements.
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Viking Mines Limited
ABN 38 126 200 280
DIRECTORS’ REPORT
Your Directors present their annual financial report on the consolidated entity (referred to hereafter as the “Group”) consisting
of Viking Mines Limited (the “Company” or “Parent”) and the entities it controlled at the end of, or during, the financial year
ended 30 June 2014. In order to comply with the Corporations Act, the Directors report as follows:
Directors
The following persons were Directors of the Company during the whole of the financial period and up to the date of this
report:
John William (Jack) Gardner (Non-Executive Chairman)
Jack Gardner was appointed a Director on 27th July 2007. He graduated with Bachelor of Engineering from the University of
Melbourne in 1962 and has a Master of Business degree from Curtin University. He is a Fellow of The Institution of Engineers
Australia.
Mr Gardner has a long and distinguished career in servicing the mining industry in Australia as well as in West Africa. As a
Director and General Manager of Minproc Engineers he was responsible for design and construction of gold and base metal
plants. He established Minproc in Ghana where the company became that country’s leading mining project engineers.
In Ghana he also headed Ghana Manganese Company (GMC) as Executive Chairman after negotiating the purchase of its
projects from the Government of Ghana. Privately owned, GMC grew from 300,000 tpa to 1.7 million tpa of manganese
carbonate shipments, until it was acquired for cash.
Mr Gardner has been a Director of Mincor Resources Limited since its inception and 1996 ASX listing. Mincor today is an
ASX Top 300 company. It operates underground nickel sulphide mines in Western Australia.
Mr Gardner was also associated with Guinor from 1993, overseeing a number of expansions of the Lero heap leach project,
and was pivotal in the development of the 350,000 oz pa LEFA Corridor Project. Guinor was acquired by Crew Gold
Corporation Inc.
Peter McMickan (Managing Director)
Peter McMickan was appointed a Director on 27th July 2007. He graduated with an Honors Degree in Geology from the
University of Melbourne, Australia in 1977 and has post-graduate qualifications in Mineral Economics from Macquarie
University and is a Member of the Australasian Institute of Mining and Metallurgy.
His professional career has spanned 30 years worldwide with a number of major, well respected international exploration and
mining companies including Newmont, Pancontinental Mining, BP Minerals, Kalgoorlie Consolidated Gold Mines and
Homestake. He is a highly regarded geologist and manager, with a proven track record of business and technical success
throughout his career.
His recent experience covers corporate, senior management and technical supervision of mining, development and exploration
projects throughout Australia, Africa and Europe. He managed the mine geology, exploration and successful resource
development of Guinor’s Lero gold project in Guinea, West Africa. During his four years with the company, the company’s
exploration spend increased to US$1 million per month, which sustained the existing heap leach operation and resulted in
expansion of the resource to over 4Moz of gold in the space of two years. This expanded resource base underpinned a major
re-development of the Lero project to a 6Mtpa CIP/CIL operation producing 350,000 ounces of gold per year.
Trygve Kroepelien (Non-Executive Director)
Trygve Kroepelien was appointed a Director on 27th July 2007. He is a graduate of Dartmouth College, N.H., USA (BA) and
Tuck School of Business Administration, N.H, USA (MBA).
Mr Kroepelien has a wealth of successful experience throughout West Africa, particularly in Guinea, Ghana, Burkina Faso and
Mauritania. For the past 30 years he has been active in the private sector, promoting mineral resource projects in West Africa.
Mr Kroepelien has continued to play an active role in the development of West African mineral resources He is also closely
associated with the development of bauxite in Guinea.
Mr Newlands was a non-executive director from the beginning of the financial year until his resignation on 27 December
2013.
13
Viking Mines Limited
ABN 38 126 200 280
Interests in the shares and options of the Company and related bodies corporate
The following relevant interests in shares and options of the Company or a related body corporate were held by the directors
and their associates as at the date of this report.
Directors
John Gardner
Peter McMickan
Trygve Kroepelien
Company Secretary
Number of options over
ordinary shares
Number of fully paid
ordinary shares
2,876,065
2,805,368
1,300,000
10,487,643
3,046,837
3,874,000
Michael Langoulant
Mr Langoulant is a Chartered Accountant with over 20 years' experience in corporate administration and fundraising for public
companies. Mr Langoulant had ten years with large international accounting firms, and has acted as chief financial officer,
company secretary and non-executive director for a number of publicly listed companies. Mr Langoulant established his own
corporate services consultancy firm in 1994.
Principal activity
The principal activity of the Group during the financial period was investment in mineral exploration projects.
Dividends
No dividend has been paid or declared since the start of the financial period and the Directors do not recommend the payment
of a dividend in respect of the financial period.
Review of operations
Information on the operations of the Group is set out in the review of Operations Report on pages 4 to 12 of this Annual
Report.
Significant changes in the state of affairs
Apart from the proposed takeover of Auminco Limited as outlined in the Operations Report there have been no significant
changes in the state of affairs of the Group to the date of this report.
Matters subsequent to the end of the financial period
There has not been any matter or circumstance that has arisen after balance date that has significantly affected, or may
significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future
financial periods.
Likely developments and expected results
Additional comments on expected results of certain operations of the Group are included in the review of operations and
activities.
Environmental legislation
The Group is subject to significant environmental legal regulations in respect to its exploration and evaluation activities in
Ghana. There have been no known breaches of these regulations and principles.
Indemnification and insurance of Directors and officers
During the financial period the Company has paid premiums in respect of a contract insuring all Directors and officers of the
Company and its controlled entities against liabilities incurred as Directors or officers to the extent permitted by the
Corporations Act 2001. Due to a confidentiality clause in the contract the amount of the premium has not been disclosed.
Meetings of Directors
During the financial period there were 9 formal Directors’ meetings. All other matters that required formal Board resolutions
were dealt with via written circular resolutions. In addition, the Directors met on an informal basis at regular intervals during
the financial period to discuss the Group’s affairs.
The number of meetings of the Company’s board of Directors attended by each director were:
14
Viking Mines Limited
ABN 38 126 200 280
J Gardner
P McMickan
T Kroepelien
M Newlands
Directors’ meetings
held
9
9
9
6
Directors’ meetings
attended
9
9
9
5
Audit Committee
meeting held
2
*
2
2
Audit Committee
meeting held
2
*
2
2
* Not an audit committee member
Shares under option
Outstanding share options at the date of this report are as follows:
Grant Date
Date of expiry
Exercise price
Number of options
24 August 2012
26 November 2012
31 August 2014
31 August 2014
$0.18
$0.18
12,683,913
10,000,000
No option holder has any right under the options to participate in any other share issue of the Company or any other
controlled entity.
Shares issued on the exercise of options
There have been no shares issued upon the exercise of options.
15
Viking Mines Limited
ABN 38 126 200 280
DIRECTORS’ REPORT
Remuneration Report
This report outlines the remuneration arrangements in place for the key management personnel of Viking Mines Limited (the
“Company”) for the financial year ended 30 June 2014. The information provided in this remuneration report in relation to the
current financial year has been audited as required by Section 308(3C) of the Corporations Act 2001.
The remuneration report details the remuneration arrangements for key management personnel (“KMP”) who are defined as
those persons having authority and responsibility for planning, directing and controlling the major activities of the Company
and the Group, directly or indirectly, including any Director (whether executive or otherwise) of the Company, and includes
all executives of the Company and the Group
Key Management Personnel
(i) Directors
J Gardner (Chairman)
P McMickan (Managing Director)
T Kroepelien (Non-Executive Director)
M Newland (Non-Executive Director)
(ii) Other executives
M Langoulant (Company Secretary)
Details of Directors’ and executives’ remuneration are set out under the following main headings:
A
B
C
D
Principles used to determine the nature and amount of remuneration
Details of remuneration
Employment contracts/Consultancy agreements
Share-based compensation
Principles used to determine the nature and amount of remuneration
A
The objective of the Company’s executive reward framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework aims to align executive reward with the creation of value for
shareholders. The key criteria for good reward governance practices adopted by the Board are:
competitiveness and reasonableness
acceptability to shareholders
performance incentives
transparency
capital management
The framework provides a mix of fixed salary, consultancy agreement based remuneration, and share based incentives.
The broad remuneration policy for determining the nature and amount of emoluments of Board members and senior executives
of the Company is governed by the full Board. Although there is no separate remuneration committee the Board’s aim is to
ensure the remuneration packages properly reflect Directors and executives duties and responsibilities. The Board assesses the
appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant
employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention and
motivation of a high quality Board and executive team.
The current remuneration policy adopted is that no element of any director/executive package be directly related to the
Company’s financial performance. Indeed there are no elements of any Director or executive remuneration that are dependent
upon the satisfaction of any specific condition. The overall remuneration policy framework however is structured in an
endeavour to advance/create shareholder wealth.
Non-executive Directors
Fees and payments to non-executive Directors reflect the demands which are made on, and the responsibilities of, the
Directors. Non-executive Directors’ fees and payments are reviewed annually by the Board and are intended to be in line with
the market.
16
Viking Mines Limited
ABN 38 126 200 280
Remuneration Report (cont)
Directors’ fees
One of the Directors is an executive with the remainder being non-executive. Each non-executive Director receives a separate
fixed fee for their services as directors. The current non-executive Director fee is set at $75,000 per annum for the Chairman and
$50,000 per annum per non-executive director. . However in reflection of the Company’s cash position and the equity markets
director fees were reduced by 30% as from October 2012. In addition as from 1 September 2013 director fees have been reduced
to45% of the original contract amounts.
Retirement allowances for Directors
Apart from superannuation payments paid on salaries, there are no retirement allowances for Directors.
Executive pay
The executive pay and reward framework has the following components:
base pay and benefits such as superannuation
long-term incentives through participation in employee equity issues
Base pay
All executives are either full time employees or consultants that are paid on an agreed basis that have been formalised in
consultancy agreements.
Benefits
Apart from superannuation paid on executive salaries there are no additional benefits paid to executives.
Short-term incentives
There are no current short term incentive remuneration arrangements.
Employee/Consultant options
To ensure that the Company has appropriate mechanisms in place to continue to attract and retain the services of suitable
directors and employees, the Company has issued options to key personnel.
There have been no employee option issues during the financial period however, 6,000,000 employee options exercisable at
$0.18 and expiring 31 August 2014 were issued in the year ended 30 June 2013.
B
Details of remuneration
Amounts of remuneration
Details of the remuneration of the Directors and key management personnel (as defined in AASB 124 Related Party
Disclosures) of the Company and the Group for the year ended 30 June 2014 are set out in the following tables. There are no
elements of remuneration that are directly related to performance.
The key management personnel of the Group are the Directors of the Company and those executives that have authority and
responsibility for planning, directing and controlling the activities of the Group.
17
Viking Mines Limited
ABN 38 126 200 280
Remuneration of key management personnel
Year ended
30 June 2014
Name
Director
J Gardner
P McMickan
T Kroepelien
M Newlands*
Key management personnel
M Langoulant**
Year ended
30 June 2013
Director
J Gardner
P McMickan
T Kroepelien
M Newlands
Key management personnel
M Langoulant*
Primary benefits
Salary and/or
consulting fees
$
Directors’
fees
$
Post-
employment
benefits
Super-
annuation
$
Share-based
payment
Equity
option issues
$
-
112,508
-
-
-
-
220,875
-
-
-
26,250
-
17,500
17,500
-
63,750
-
42,500
42,500
-
2,363
14,190
-
-
-
5,737
18,871
-
-
-
TOTAL
$
28,613
126,698
17,500
17,500
-
-
-
-
-
16,080
26,800
10,720
10,720
85,567
266,546
53,220
53,220
-
-
* Mr Newlands resigned as a director in December 2013.
** Fees for bookkeeping, accounting and corporate administration services of $61,800 (2013:$ 51,600) were paid to a
company of which he is a Director and shareholder.
C
Employment contracts/Consultancy agreements
On appointment to the Board, all non-executive Directors enter into a service agreement with the Company in the form of a
letter of appointment. A formal employment contract with the Managing Director expired in May 2013.
Share-based compensation
D
Options
Options are granted to employees and consultants as determined by the Board. There have been no options issued during the
last financial year.
18
Viking Mines Limited
ABN 38 126 200 280
DIRECTORS’ REPORT
Auditor independence and non-audit services
Section 307C of the Corporations Act 2001 requires our auditors, Rothsay Chartered Accountants, to provide the Directors of
the Company with an Independence Declaration in relation to the audit of the annual report. This Independence Declaration is
set out on the next page and forms part of this Directors’ report for the year ended 30 June 2014.
Non-audit services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s
expertise and experience with the Company and/or the consolidated entity are important. The Company has considered the
position and is satisfied that the provision of the non-audit services is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001. The auditor has not provided any material non-audit services meaning that
auditor independence was not compromised.
Proceedings on behalf of Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of
the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on
behalf of the Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the
Corporations Act 2001.
This report is made in accordance with a resolution of the Directors.
Jack Gardner
Chairman
Perth, Western Australia
10 September 2014
19
Viking Mines Limited
ABN 38 126 200 280
CORPORATE GOVERNANCE STATEMENT
Viking Mines Limited (the “Company”) considers the adoption of appropriate systems of control and accountability as
the basis for the administration of corporate governance. Some of these policies and procedures are summarised in this
report. Commensurate with the spirit of the ASX Corporate Governance Council's Corporate Governance Principles and
Recommendations 2nd edition (“Principles” and/or “Recommendations”)
the Company has followed each
Recommendation where the Board has considered the recommendation to be an appropriate benchmark for corporate
governance practices, taking into account factors such as the size of the Company and the Board, resources available and
activities of the Company. Where, after due consideration, the Company's corporate governance practices depart from
the Recommendations, the Board has offered full disclosure of the nature of, and reason for, the adoption of its own
practice.
Further information about the Company's corporate governance practices, polices and charters are set out on the
Company's website at www.vikingashanti.com. In accordance with the Principles and Recommendations, information
published on the Company's website includes charters (for the Board and its sub-committees), codes of conduct and other
policies and procedures relating to the Board and its responsibilities.
Disclosure – Principles & Recommendations
The Company reports below on how it has followed (or otherwise departed from) each of the Principles &
Recommendations during the 2013/2014 financial year ("Reporting Period").
Board
Roles and responsibilities of the Board and Senior Executives
(Recommendations: 1.1, 1.3)
The Company has established the functions reserved to the Board, and those delegated to senior executives and has set
out these functions in its Board Charter.
The Board is collectively responsible for promoting the success of the Company through its key functions of overseeing
the management of the Company, providing overall corporate governance of the Company, monitoring the financial
performance of the Company, engaging appropriate management commensurate with the Company's structure and
objectives, involvement in the development of corporate strategy and performance objectives, and reviewing, ratifying
and monitoring systems of risk management and internal control, codes of conduct and legal compliance.
Senior executives are responsible for supporting the Managing Director and assisting the Managing Director in
implementing the running of the general operations and financial business of the Company in accordance with the
delegated authority of the Board. Senior executives are responsible for reporting all matters which fall within the
Company's materiality thresholds at first instance to the Managing Director or, if the matter concerns the Managing
Director, directly to the Chair or the lead independent director, as appropriate.
Skills, experience, expertise and period of office of each Director
(Recommendation: 2.6)
A profile of each Director setting out their skills, experience, expertise and period of office is set out in the Directors'
Report.
The mix of skills and diversity for which the Board is looking to achieve in membership of the Board are: ability to
provide guidance on the development of the Company’s assets; independence; understanding of exploration; capital
markets; geological; finance; and mining engineering experience.
Director independence
(Recommendations: 2.1, 2.2, 2.3, 2.6)
For the Reporting Period the Board did not have a majority of directors who were independent.
The Company has not complied with this Recommendation. The Board now has two non-independent Directors and only
one independent Director. Given the size and scope of the Company's operations, the Board considers that it has the
relevant experience in the exploration and mining industry and is appropriately structured to discharge its duties in a
21
Viking Mines Limited
ABN 38 126 200 280
manner that is in the best interests of the Company and its shareholders from both a long-term strategic and operational
perspective.
The Board considers the independence of directors having regard to its Policy on Assessing the Independence of
Directors, which provides that when determining the independent status of a director the Board should consider whether
the director:
is a substantial shareholder of the Company or an officer, of, or otherwise associated directly with, a substantial
shareholder of the Company;
is employed, or has previously been employed in an executive capacity by a Group company and there has not
been a period of at least 3 years between ceasing such employment and serving on the Board;
has within the last 3 years been a principal of a material professional adviser or a material consultant to the Group;
has a material contractual relationship with the Company or other group member other than as a director;
is a material supplier or customer of the Group, or an officer of or otherwise associated directly or indirectly with
a material supplier or customer.
The Board has agreed on the following guidelines for assessing the materiality of matters:
Balance sheet items are material if they have a value of more than 5% of pro-forma net asset.
Profit and loss items are material if they will have an impact on the current year operating result of 5% or more.
Items are also material if they impact on the reputation of the Company, involve a breach of legislation, are
outside the ordinary course of business, could affect the Company’s rights to its assets, if accumulated would
trigger the quantitative tests, involve a contingent liability that would have a probable effect of 5% or more on
balance sheet or profit and loss items, or will have an effect on operations which is likely to result in an increase
or decrease in net income or dividend distribution of more than 5%.
The independent Directors of the Company are Mr Tryve Kroepelian and Mr Mark Newlands (until his retirement),
neither of which is the Chair. Whilst the Company recognises the benefit of having an independent Director as Chair, the
Board was of the view that Mr Jack Gardner continues to be the most appropriate person for the position of Chair.
The Chief Executive Officer is Peter McMickan who is not also Chair of the Board.
Independent professional advice
(Recommendation: 2.6)
To assist Directors with independent judgement, it is the Board's policy that if a Director considers it necessary to obtain
independent professional advice to properly discharge the responsibility of their office as a Director then, provided the
Director first obtains approval from the Chair for incurring such expense, the Company will pay the reasonable expenses
associated with obtaining such advice.
Selection and (Re)Appointment of Directors
(Recommendation: 2.6)
In determining candidates for the Board, the Nomination Committee (or equivalent) follows a prescribed process
whereby it evaluates the mix of skills, experience and expertise of the existing Board. In particular, the Nomination
Committee (or equivalent) is to identify the particular skills that will best increase the Board's effectiveness.
Consideration is also given to the balance of independent directors. Potential candidates are identified and, if relevant,
the Nomination Committee (or equivalent) recommends an appropriate candidate for appointment to the Board. Any
appointment made by the Board is subject to ratification by shareholders at the next general meeting.
Each Director other than the Managing Director, must not hold office (without re-election) past the third annual general
meeting of the Company following the Director's appointment or three years following that Director's last election or
appointment (whichever is the longer). However, a Director appointed to fill a casual vacancy or as an addition to the
Board must not hold office (without re-election) past the next annual general meeting of the Company. At each annual
general meeting a minimum of one Director or one third of the total number of Directors must resign. A Director who
retires at an annual general meeting is eligible for re-election at that meeting. Re-appointment of Directors is not
automatic.
Board committees
Nomination Committee
(Recommendations: 2.4, 2.6)
22
Viking Mines Limited
ABN 38 126 200 280
The Board has not established a separate Nomination Committee. The Board believes that there would be no efficiencies
gained by establishing a separate Nomination Committee. Accordingly, the Board performs the role of the Nomination
Committee. Items that are usually required to be discussed by a Nomination Committee are marked as separate agenda
items at Board meetings when required. When the Board convenes as the Nomination Committee it carries out those
functions which are delegated to it in the Company’s Nomination Committee Charter. The Board deals with any
conflicts of interest that may occur when convening in the capacity of the Nomination Committee by ensuring that the
Director with conflicting interests is not party to the relevant discussions.
The full Board did not officially convene as a Nomination Committee during the Reporting Period, however nomination-
related discussions occurred from time to time during the year as required.
Audit Committee
(Recommendations: 4.1, 4.2, 4.3, 4.4)
The Board has established an Audit Committee however the composition of the Audit Committee does not comply with
the Recommendations as the Chairman of the Committee is also the Chairman of the Company.
At present, the Board considers the Chairman, Mr Jack Gardner to be the most appropriate person to Chair the Audit
Committee given his financial experience. Notwithstanding this departure from the Recommendations the Board
considers the composition of the Audit Committee will be sufficient to enable the Audit Committee to properly discharge
its duties.
The Board has stated its audit and compliance responsibilities in the Board Charter.
Remuneration Committee
(Recommendations: 8.1, 8.2, 8.3, 8.4)
The Board has not established a Remuneration Committee.
The Board considers that no efficiencies or other benefits would be gained by establishing a separate Remuneration
Committee. The Company’s constitution provides that the remuneration of non-executive Directors will not be more than
the aggregate fixed sum determined by general meeting. Remuneration matters, usually considered by a Remuneration
Committee, were considered at during a number of Board meetings during the year..
Details of remuneration, including the Company’s policy on remuneration, are contained in the “Remuneration Report”
which forms of part of the Directors’ Report. The Company’s policy is to remunerate non-executive Directors at market
rates (for comparable companies) for time, commitment and responsibilities. Fees for non-executive Directors are not
linked to the performance of the Company. Given the Company’s stage of development and the financial restriction
placed on it, the Company may consider it appropriate to issue unlisted options to non-executive Directors, subject to
obtaining the relevant approvals. The grant of options is designed to attract and retain suitability qualified non-executive
Directors.
Performance evaluation
Senior executives
(Recommendations: 1.2, 1.3)
The Managing Director is responsible for evaluating the performance of senior executives. The performance evaluation
of senior executives is undertaken by meetings held with each senior executive and the Managing Director on an
informal basis at least once a year.
There was no departure from this policy during the year.
Board, its committees and individual Directors
(Recommendations: 2.5, 2.6)
The Chair is responsible for evaluating the performance of the Board and, when deemed appropriate, Board committees
and individual Directors. Evaluations of the Board and its committees are undertaken by way of round-table discussions,
and individual Directors by one on one interviews.
There was no departure from this policy during the year.
23
Viking Mines Limited
ABN 38 126 200 280
Ethical and responsible decision making
Code of Conduct
(Recommendations: 3.1, 3.5)
The Company has established a Code of Conduct as to the practices necessary to maintain confidence in the Company's
integrity, the practices necessary to take into account its legal obligations and the reasonable expectations of its
stakeholders and the responsibility and accountability of individuals for reporting and investigating reports of unethical
practices.
Diversity
(Recommendations: 3.2, 3.3, 3.4, 3.5)
The Company has established a Diversity Policy, which includes requirements for the Board to establish measurable
objectives for achieving gender diversity and for the Board to assess annually both the objectives and progress towards
achieving them.
Given the small size of the Company, the Board has not set measurable objectives for achieving gender diversity.
However, the Company's Board does take into account the gender, age, ethnicity and cultural background of potential
Board members, executives and employees.
At the date of this report the Company has only 1 male employee and no female Board members.
A summary of the Company’s Diversity Policy is disclosed on the Company’s website.
Continuous Disclosure
(Recommendations: 5.1, 5.2)
The Company has established written policies and procedures designed to ensure compliance with ASX Listing Rule
disclosure requirements and accountability at a senior executive level for that compliance.
Shareholder Communication
(Recommendations: 6.1, 6.2)
The Company has designed a communications policy for promoting effective communication with shareholders and
encouraging shareholder participation at general meetings.
Risk Management
Recommendations: 7.1, 7.2, 7.3, 7.4)
The Board has adopted a Risk Management Policy, which sets out the Company's risk profile. Under the policy, the
Board is responsible for approving the Company's policies on risk oversight and management and satisfying itself that
management has developed and implemented a sound system of risk management and internal control.
Under the policy, the Board delegates day-to-day management of risk to the Managing Director, who is responsible for
identifying, assessing, monitoring and managing risks. The Managing Director is also responsible for updating the
Company's material business risks to reflect any material changes, with the approval of the Board.
In fulfilling the duties of risk management, the Managing Director may have unrestricted access to Company employees,
contractors and records and may obtain independent expert advice on any matter they believe appropriate, with the prior
approval of the Board.
In addition, the following risk management measures have been adopted by the Board to manage the Company's material
business risks:
the Board has established authority limits for management, which, if proposed to be exceeded, requires prior
Board approval; and
the Board has adopted a compliance procedure for the purpose of ensuring compliance with the Company's
continuous disclosure obligations.
24
Viking Mines Limited
ABN 38 126 200 280
During the Reporting Period, the Company formalised its approach to risk management by documenting all material
business risks in a risk register and allocation of ownership for material business risks to the Managing Director and
management of individual material business risks to senior management and individuals within the organisation. The
risk register is regularly reviewed by the Board and management. All risks identified in the risk register will be reviewed
and assessed by management and the Board at least annually. Risk is a standing discussion item at scheduled Board
meetings.
The key categories of risk of the Company, as reported on by management, include:
the ability to raise fresh equity capital to maintain minimal operations;
cash management;
financial reporting;
ASX reporting compliance;
project ownership retention;
executive travel safety;
retention of key employees;
environmental compliance;
foreign exchange risk; and
sovereign risk.
The Board has required management to design, implement and maintain risk management and internal control systems to
manage the Company's material business risks. The Board also requires management to report to it confirming that those
risks are being managed effectively. The Board has received a report from management as to the effectiveness of the
Company's management of its material business risks for the Reporting Period.
The Managing Director and the CFO equivalent have provided a declaration to the Board in accordance with section
295A of the Corporations Act and have assured the Board that such declaration is founded on a sound system of risk
management and internal control and that the system is operating effectively in all material respects in relation to
financial reporting risks.
25
Viking Mines Limited
ABN 38 126 200 280
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Note
2
2
2
3
Other income
Other expenses
Loss before income tax expense
Income tax expense
Loss after income tax expense
Net loss for the year
Other comprehensive income
Exchange differences on translation
of foreign operations
Income tax relating to components
of other comprehensive income
Other comprehensive income, net
of tax
Total comprehensive loss for the
year
Loss attributable to:
Owners of the Company
Non-Controlling Interest
Total comprehensive loss
attributable to:
Owners of the Company
Non-Controlling Interest
Basic loss per share
(cents per share)
4
Consolidated
2014
$
20,752
(759,309)
(738,557)
2013
$
18,498
(5,045,637)
(5,027,139)
(738,557)
(5,027,139)
-
-
(738,557)
(5,027,139)
(738,557)
(5,027,139)
(91,119)
21,472
-
-
(91,119)
21,472
(829,676)
(5,005,667)
(730,370)
(8,187)
(738,557)
(821,489)
(8,187)
(829,676)
Cents
(0.7)
(4,924,804)
(102,335)
(5,027,139)
(4,903,332)
(102,335)
(5,005,667)
Cents
(6.0)
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
26
Viking Mines Limited
ABN 38 126 200 280
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2014
Current Assets
Cash and cash equivalents
Trade and other receivables
Total Current Assets
Non-Current Assets
Plant and equipment
Exploration project acquisition costs
Receivable
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Borrowings
Provisions
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Outside equity interest
Total Equity
Note
6
7
8
9
7
10
11
12
13
Consolidated
2014
$
33,014
29,627
62,641
2013
$
244,264
11,402
255,665
3,516
3,000,000
500,253
14,537
3,000,000
-
3,503,769
3,014,537
3,566,410
3,270,202
257,914
300,000
-
557,914
120,492
-
21,474
141,966
557,914
141,966
3,008,496
3,128,237
16,852,732
350,874
(13,453,885)
(741,225)
16,142,797
441,993
(12,723,515)
(733,038)
3,008,496
3,128,237
The above statement of financial position should be read in conjunction with the accompanying notes.
27
Viking Mines Limited
ABN 38 126 200 280
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2014
Issued
capital
Accumulated
losses
Share based
payments
reserve
Consolidated
$
$
$
Foreign
currency
translation
reserve
$
Outside
Equity
Interest
$
Total equity
$
Balance at 1 July 2012
14,547,939
(7,798,711)
136,800
176,521
(630,703)
6,431,846
Loss for the period
Other comprehensive
income
Total comprehensive loss
for the year
Outside equity interest in
loss
Shares issues, net of capital
raising costs
Share based compensation
-
-
-
-
(5,027,139)
-
(5,027,139)
102,335
-
-
-
-
1,594,858
-
-
-
-
107,200
-
21,472
21,472
-
-
-
-
-
-
(102,335)
-
-
(5,027,139)
21,472
(5,005,667)
-
1,594,858
107,200
Balance at 30 June 2013
16,142,797
(12,723,515)
244,000
197,993
(733,038)
3,128,237
Balance at 1 July 2013
16,142,797
(12,723,515)
244,000
197,993
(733,038)
3,128,237
Loss for the period
Other comprehensive
income
Total comprehensive loss
for the year
Outside equity interest in
loss
Shares issues, net of capital
raising costs
-
-
-
-
709,935
(738,557)
-
(738,557)
8,187
-
-
-
-
-
-
-
(91,119)
(91,119)
-
-
-
-
-
(8,187)
(738,557)
(91,119)
(829,676)
-
-
709,935
Balance at 30 June 2014
16,852,732
(13,453,885)
244,000
106,874
(741,225)
3,008,496
The above statement of changes in equity should be read in conjunction with the accompanying notes.
28
Viking Mines Limited
ABN 38 126 200 280
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2014
Cash flows from operating activities
Payments to suppliers and employees
Interest received
Note
Consolidated
Inflows/
(Outflows)
2014
$
Inflows/
(Outflows)
2013
$
(617,310)
3,453
(751,728)
18,498
Net cash outflow from operating activities
21(a)
(613,857)
(733,230)
Cash flows from investing activities
Loan to others
Payments for exploration and evaluation
Proceeds from sale of plant
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from the issue of shares/options
Borrowings
Capital raising costs
Net cash inflow from financing activities
Net increase/(decrease) in cash held
Effect of exchange rate fluctuations on cash
Cash at the beginning of reporting period
(500,253)
(126,446)
17,299
-
(1,171,096)
(609,400)
(1,171,096)
788,817
300,000
(78,882)
1,009,935
1,683,391
-
(67,094)
1,616,297
(210,662)
(288,029)
(589)
814
244,265
532,294
Cash at the end of the reporting period
6
33,014
244,265
The above statement of cash flows should be read in conjunction with the accompanying notes.
29
Viking Mines Limited
ABN 38 126 200 280
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
Note 1: Statement of significant accounting policies
(a)
Basis of preparation
The financial report is a general-purpose financial report, which has been prepared in accordance with the
requirements of the Corporations Act 2001, Accounting Standards and Interpretations and complies with other
requirements of the law. The financial report has also been prepared on a historical cost basis. The Company is
registered and domiciled in Australia.
Going Concern
The Company and its controlled entities as at 30 June (the Group) do not generate sufficient cash flows from their
operating activities to finance these activities. Thus the continuing viability of the Group and its ability to continue
as a going concern and meet its debts and commitments as they fall due are dependent upon the Group being
successful in completing a capital raising and/or asset sale/joint venture agreement in the next 12 months. The
directors have mitigated this risk by reducing its corporate overheads and postponing expenditure on the Group’s
projects where possible.
As a result of these matters, there is a material uncertainty that may cast significant doubt on whether the Group will
continue as a going concern and, therefore, whether it will realise its assets and settle its liabilities and commitments
in the normal course of business and at the amounts stated in the financial report. However, the directors believe that
the Group will be successful in the above matters and, accordingly, have prepared the financial report on a going
concern basis.
(b)
(c)
(d)
Adoption of new and revised standards
Changes in accounting policies on initial application of Accounting Standards
In the year ended 30 June 2014, the Group has reviewed all of the new and revised Standards and Interpretations
issued by the AASB that are relevant to its operations and effective for the current annual reporting period. It has
been determined by the Group that there is no impact, material or otherwise, of the new and revised Standards and
Interpretations on its business and, therefore, no change is necessary to Group accounting policies.
The Group has also reviewed all new Standards and Interpretations that have been issued but are not yet effective
for the year ended 30 June 2014. As a result of this review the Directors have determined that there is no impact,
material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no
change necessary to Group accounting policies.
Statement of compliance
The financial report was authorised by the Board of directors for issue on 10 September 2014.
The financial report complies with Australian Accounting Standards, which include Australian equivalents to
International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report,
comprising the financial statements and notes thereto, complies with International Financial Reporting Standards
(IFRS).
Basis of consolidation
The consolidated financial statements comprise the financial statements of Viking Mines Limited and its controlled
entities as at 30 June (the Group).
The financial statements of the controlled entities are prepared for the same reporting period as the Parent, using
consistent accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses
and profit and losses resulting from intra-group transactions have been eliminated in full. Controlled entities are fully
consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on
which control is transferred out of the Group. Control exists where the Company has the power to govern the
financial and operating policies of an entity so as to obtain benefits from its activities.
(e)
Significant accounting judgements estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of
future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of certain assets and liabilities within the next annual reporting period are:
30
Viking Mines Limited
ABN 38 126 200 280
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
Note 1: Statement of significant accounting policies (continued)
(f)
(g)
(h)
Deferred exploration expenditure:
The Group’s main activity is exploration and evaluation for minerals. The nature of exploration activities are such
that it requires interpretation of complex and difficult geological models in order to make an assessment of the size,
shape, depth and quality of resources and their anticipated recoveries. The economic, geological and technical factors
used to estimate mining viability may change from period to period. In addition exploration activities by their nature
are inherently uncertain. Changes in all these factors can impact exploration asset carrying values.
Share-based payment transactions:
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using a Black and Scholes model.
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the
revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is
recognised:
(i) Interest income
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial
asset.
Cash and cash equivalents
Cash comprises cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Temporary
bank overdrafts are included in cash at bank and in hand. Permanent bank overdrafts are shown within borrowings in
current liabilities in the balance sheet.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as
defined above, net of outstanding bank overdrafts.
Income tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted
by the balance sheet date.
Deferred income tax is provided on all temporary differences at the balance date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss; or
when the taxable temporary difference is associated with investments in controlled entities, associates or
interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it
is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax
assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised,
except:
when the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; or
when the deductible temporary difference is associated with investments in controlled entities, associates or
interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is
probable that the temporary difference will reverse in the foreseeable future and taxable profit will be
available against which the temporary difference can be utilised.
31
Viking Mines Limited
ABN 38 126 200 280
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
Note 1: Statement of significant accounting policies (continued)
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax
asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it
has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the financial
period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted
or substantively enacted at the balance date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the
same taxation authority.
(i)
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority,
in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense
item as applicable; and
receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables in the balance sheet.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows
arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, are
classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
(j)
Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:
Office equipment – 20%
Plant and equipment – 20% - 40%
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each
financial period end.
(k)
Impairment of assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such
indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the
asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its
value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets and the asset's value in use cannot be estimated to be close
to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to which it
belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or
cash-generating unit is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
Impairment losses relating to continuing operations are recognised in those expense categories consistent with the
function of the impaired asset unless the asset is carried at re-valued amount (in which case the impairment loss is
treated as a revaluation decrease).
32
Viking Mines Limited
ABN 38 126 200 280
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
Note 1: Statement of significant accounting policies (continued)
(l)
(m)
(n)
(o)
An assessment is also made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is
estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates
used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case
the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the
carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for
the asset in prior financial periods. Such reversal is recognised in profit or loss unless the asset is carried at revalued
amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge
is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic
basis over its remaining useful life.
Trade and other payables
Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services
provided to the Group prior to the end of the financial period that are unpaid and arise when the Group becomes
obliged to make future payments in respect of the purchase of these goods and services.
Provisions
Where applicable, provisions are recognised when the Group has a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and a reliable estimate can be made of the amount of the obligation.
When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the
reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense
relating to any provision is presented in the statement of comprehensive income net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that
reflects the risks specific to the liability.
When discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing
cost.
Employee leave benefits
Wages, salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave
expected to be settled within 12 months of the reporting date are recognised in other payables in respect of
employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the
liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and are
measured at the rates paid or payable.
Share-based payment transactions
Equity settled transactions:
The Group provides benefits to employees and consultants of the Group in the form of share-based payments,
whereby employees render services in exchange for shares or rights over shares (equity-settled transactions).
The cost of these equity-settled transactions with employees and consultants is measured by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined by using the
Black and Scholes model.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the
period in which any performance and/or service conditions are fulfilled, ending on the date on which the relevant
employees become fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects
(i) the extent to which the vesting period has expired, and
(ii) the Group’s best estimate of the number of equity instruments that will ultimately vest. No adjustment is made
for the likelihood of market performance conditions being met as the effect of these conditions is included in the
determination of fair value at grant date. The statement of comprehensive income charge or credit for a period
represents the movement in cumulative expense recognised as at the beginning and end of that period.
33
Viking Mines Limited
ABN 38 126 200 280
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
Note 1: Statement of significant accounting policies (continued)
(p)
(q)
Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax, from the proceeds.
Earnings per share
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any
costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average
number of ordinary shares.
Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for:
costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the
dilution of potential ordinary shares, divided by the weighted average number of ordinary shares and
dilutive potential ordinary shares.
(r)
Exploration and evaluation expenditure
Exploration costs are expensed as incurred. Acquisition costs are accumulated in respect of each separate area of
interest. Acquisition costs are carried forward where right of tenure of the area of interest is current and they are
expected to be recouped through the sale or successful development and exploitation of the area of interest or,
where exploration and evaluation activities in the area of interest have not yet reached a stage that permits
reasonable assessment of the existence of economically recoverable reserves. When an area of interest is
abandoned or the Directors’ decide that it is not commercial, any accumulated acquisition costs in respect of that
area are written off in the financial period and accumulated acquisition costs written off to the extent that they will
not be recovered in the future. Amortisation is not charged on acquisition costs carried forward in respect of areas
of interest in the development phase until production commences.
34
Viking Mines Limited
ABN 38 126 200 280
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
Note 2: Revenue and expenses
(a) Revenue from continuing operations
Other revenue
Interest received
Profit on sale of plant
(b) Expenses
Loss from ordinary activities before income tax
expense includes the following specific expenses:
Depreciation
Takeover transaction costs
Direct exploration and project evaluation
Impairment of exploration project acquisition costs
Auditors’ fees
Employee costs
Consultants
Investor relations
Note 3: Income tax
Income tax expense recognised in income statement
Current income tax
Current income tax payable
Income tax expense/(benefit) reported in statement of
comprehensive income
Reconciliation to income tax expense on accounting
loss
Accounting loss before tax
Tax expense (revenue) at the statutory income tax rate
of 30%
Sundry non-deductible expenses
Unrealised tax losses not recognised
Income tax expense
Consolidated
2014
$
2013
$
3,453
17,299
18,498
-
11,021
285,444
126,445
-
16,500
108,228
135,102
16,779
22,622
-
966,602
3,373,110
33,225
266,321
157,076
4,671
-
-
-
-
(730,370)
(4,924,804)
(219,111)
(1,477,441)
164,573
54,538
1,048,382
429,059
-
-
35
Viking Mines Limited
ABN 38 126 200 280
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
Note 3: Income tax (cont)
Unrecognised deferred tax balances
Deferred tax assets:
Share issue costs
Tax revenue losses
Deferred tax liabilities:
Net unrecognised deferred tax assets
Note 4: Earnings per share
Total basic loss per share (cents)
Consolidated
2014
$
2013
$
29,896
2,347,732
2,377,628
58,243
1,843,807
1,902,050
-
-
2,377,628
1,902,050
(0.7)
(6.0)
The loss and weighted average number of ordinary shares used in the calculation of basic
loss per share is as follows:
Net loss for the period
The weighted average number of ordinary shares
(730,370)
(4,924,804)
101,388,529
81,598,024
The diluted loss per share is not reflected as the result is anti-dilutive.
Note 5: Segment information
The Group has adopted AASB 8 Operating Segments which requires operating segments to be identified on the basis of
internal reports about components of the Group that are reviewed by the chief operating decision-maker in order to
allocate resources to the segment and to assess its performance.
The Board of Viking Mines Limited reviews internal reports prepared as consolidated financial statements and strategic
decisions of the Group are determined upon analysis of these internal reports. During the period the Group operated
predominately in one business and geographical segment, being the resources sector in Ghana. Accordingly under the
management approach outlined only one operating sector has been identified and no further disclosures are required in
the notes to the consolidated financial statements.
36
Viking Mines Limited
ABN 38 126 200 280
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
Note 6: Cash and cash equivalents
Cash at bank and on hand
Short term deposits
Consolidated
2014
$
33,014
-
33,014
2013
$
244,264
-
244,264
(a) Reconciliation to Statement of Cash Flows
The above figures agree to cash at the end of the financial period as shown in the Statement of Cash Flows.
(b) Cash at bank
These are interest bearing accounts at a weighted average interest rate of 0.5% (2013: 2.8%).
(c) Cash balances not available for use
There are no cash balances not available for use (2013: nil).
Note 7: Trade and other receivables
Current receivables
GST
Other receivables
Non-current receivables
Loan to Auminco Limited*
29,412
215
29,617
11,187
215
500,253
-
* This loan is unsecured and repayable on demand. Auminco Limited is subject to a takeover offer by
Viking (refer note 20) which Viking has declared as unconditional. The loans funds have been
utilised to repay various Auminco creditors and to advance Auminco’s coal assets. Upon completion
of the takeover this loan will be eliminated as a consolidation adjustment.
Note 8: Plant and equipment
Consolidated
Opening balance
Movement in foreign exchange
Depreciation charge
Closing net book value
Cost or fair value
Accumulated depreciation
Net carrying amount
The depreciation rates were as follows for 2014 and 2013:
Plant and equipment 20-40%
2014
Total
$
14,537
(2,660)
(8,361)
2013
Total
$
37,085
74
(22,622)
3,516
14,537
16,575
(13,059)
81,777
(67,240)
3,516
14,537
37
Viking Mines Limited
ABN 38 126 200 280
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
Note 9: Exploration project acquisition costs
Opening balance
Impairment charge
Acquisition costs in respect of areas of interest in
the exploration phase
Consolidated
2014
$
2013
$
3,000,000
-
6,373,110
(3,373,110)
3,000,000
3,000,000
The recoupment of exploration project acquisition costs carried forward is dependent upon the recoupment of costs through
successful development and commercial exploitation, or alternatively by sale of the respective areas.
In the reporting period ended 30 June 2013 there was a significant sustained drop in the price of gold. This led to a decline in
the current perceived value of gold projects, irrespective of the existence of a gold resource. In recognition of this world-wide
market re-rating of the value of gold projects the Board considered recent sales of projects similar to Viking’s, the average
“attributed value” of in-ground gold resources in west Africa and a range of other market related matters to determine the
carrying fair value for the Company’s exploration project acquisition costs. After considering all these factors the Board
determined that an impairment charge of $3.37 million was appropriate.
The Board has reviewed the carrying value of its Ghanaian gold projects and considers that no impairment charge is required
in the reporting period ended 30 June 2014.
Note 10: Trade and other payables
Trade payables *
Other payables
* Trade payables are non-interest bearing and are normally paid on 30 day terms.
Note 11: Borrowings
During the year the Company obtained a short term loan facility at 10% pa from a director
that is repayable at call
67,708
190,206
257,914
120,492
-
120,492
300,000
-
38
Viking Mines Limited
ABN 38 126 200 280
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
Consolidated
2014
$
2013
$
Note 12: Issued capital
(a) Ordinary shares issued
112,688,225 (2013: 90,150,580) ordinary shares
16,852,732
16,142,797
Holders of ordinary shares are entitled to receive dividends as declared from time to time
and are entitled to one vote per share at shareholders’ meetings. In the event of winding up
of the parent entity, ordinary shareholders rank after all creditors and are fully entitled to
any proceeds on liquidation.
(b) Movements in ordinary share capital:
Date
Details
1 July 2012
Balance at the beginning of the year
26 August 2012
15 April 2013
30 June 2013
Placement
Placement
Share issue costs
Number of
shares
69,166,667
12,683,913
8,300,000
-
90,150,580
Issue
Price
$
$
14,547,939
0.10
0.05
-
1,268,391
415,000
(88,533)
16,142,797
1 July 2013
Balance at the beginning of the year
90,150,580
16,142,797
31 December 2013
Placement
22,537,645
0.035
788,818
Share issue costs
30 June 2014
(c) Share options
-
112,688,225
(78,883)
16,852,732
Options exercisable at $0.18 on or before 31 August 2014
(d) Movements in share options
Options to acquire ordinary fully paid shares at $0.18 on or before 31 August 2014:
Beginning of the financial year
Options issued during year
Balance at end of financial year
Number of options
2014
2013
22,698,913
22,683,913
22,683,913
-
-
22,683,913
22,683,913
22,683,913
39
Viking Mines Limited
ABN 38 126 200 280
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
Note 13: Reserves
Share compensation reserve
Foreign currency translation reserve
Consolidated
2014
$
244,000
106,874
2013
$
244,000
197,993
350,874
441,993
(a) Share compensation reserve
The share compensation reserve is used to record the value of equity benefits provided to consultants and
directors as part of their remuneration. Refer Note 14.
(b)
Foreign currency translation reserve
The foreign currency translation reserve represents foreign exchange movements on the translation of financial
statements for controlled entities from the functional currency into the presentation currency of Australian
dollars.
Note 14: Share based payments
Share based payments consists of unlisted options issued to directors and consultants. The expense is recognised in the
Statement of Comprehensive Income and Statement of Changes in Equity. The following share-based payment
arrangements were in place during the current and prior periods:
Number
Grant date
Expiry Date
Exercise price $
Fair value at
grant date
10,000,000
Unlisted employee
options – 31 Aug
2014
Fair value of options granted
The fair value of the equity-settled share options granted to directors has been estimated as at the date of grant using the
Black and Scholes model taking into account the terms and conditions upon which the options were granted.
26/11/2012
31/08/2014
$0.011
$0.18
The following table lists the inputs to the Black and Scholes model used:
Dividend yield %
Expected volatility %
Risk-free interest rate %
Life of option
Exercise price
Grant date share price
Unlisted
31August 2014
Nil
80%
3.00%
21 months
$0.18
$0.08
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may
occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which
may also not necessarily be the actual outcome. No other features of options granted were incorporated into the
measurement of fair value.
40
Viking Mines Limited
ABN 38 126 200 280
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
Note 15: Financial instruments
(a) Capital risk management
Prudent capital risk management implies maintaining sufficient cash and marketable securities to ensure continuity of
tenure to exploration assets and to be able to conduct the Group’s business in an orderly and professional manner. The
Board monitors its future capital requirements on a regular basis and will when appropriate consider the need for raising
additional equity capital or to farm-out exploration projects as a means of preserving capital.
(b) Categories of financial instruments
The Group’s principal financial instruments comprise of cash and short-term deposits.
The main purpose of these financial instruments is to raise finance for the Group’s operations. The Group has various
other financial assets and liabilities such as receivables and trade payables, which arise directly from its operations. It
is, and has been throughout the period under review, the Group’s policy that no trading in financial instruments shall be
undertaken.
(c) Financial risk management objectives
The Group is exposed to market risk (including, interest rate risk and equity price risk), credit risk and liquidity risk.
The main risks arising from the Group’s financial instruments are interest rate risk and credit risk. The Board reviews
and agrees policies for managing each of these risks and they are summarised below.
(d) Market risk
There has been no change to the Group’s exposure to market risks or the manner in which it manages and measures the
risk from the previous period.
(i) Interest rate risk management
All cash balances attract a floating rate of interest. Excess funds that are not required in the short term are placed on
deposit for a period of no more than 6 months. The Group’s exposure to interest rate risk and the effective interest rate
by maturity periods is set out below.
Interest rate sensitivity analysis
As the Group has no interest bearing borrowings its exposure to interest rate movements is limited to the amount of
interest income it can potentially earn on surplus cash deposits.
At 30 June 2014, if interest rates had changed by +/- 50 basis points and all other variables were held constant, the
Group’s after tax loss would have been $4,000 (2013: $4,000) lower/higher as a result of higher/lower interest income
on cash and cash equivalents.
(e) Credit risk management
Credit risk relates to the risk that counterparties will default on their contractual obligations resulting in financial loss to
the Group. The Group has adopted a policy of only dealing with credit worthy counterparties and obtaining sufficient
collateral or other security where appropriate, as a means of mitigating the risk of financial loss from any defaults.
41
Viking Mines Limited
ABN 38 126 200 280
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
Note 15: Financial instruments (cont)
(f) Liquidity risk management
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities to ensure continuity of
tenure to exploration assets and to be able to conduct the Group’s business in an orderly and professional manner. Cash
deposits are only held with major financial institutions.
2014
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
2013
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial liabilities
Trade and other payables
Weighted
Average
Interest
Rate
0.5%
2.8%
Less than 1
month
1-3 months
3 months
– 1 year
5 +
years
33,014
529,880
562,894
257,914
257,914
304,980
244,264
11,402
255,666
120,492
120,492
135,174
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
33,014
529,880
562,894
257,914
257,914
304,980
244,264
11,402
255,666
120,492
120,492
135,174
Note 16: Commitments and contingencies
Exploration expenditure commitments
Minimum exploration expenditure commitments do not apply in Ghana and the Government does not impose a minimum
spend per licence. The exploration expenditure commitment is based on a work program system, whereby at the time for
each renewal of a licence, the Company provides an outline of work planned and expected expenditure.
42
Viking Mines Limited
ABN 38 126 200 280
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
Note 17: Key management personnel disclosures
(a) Directors
At the date of this report the directors of the Company are:
JW Gardner – Executive Chairman
P McMickan – Managing director
T Kroepelien – Non executive director
There were no changes of the key management personnel after the reporting date and the date the financial report was
authorised for issue.
(b) Key management personnel
M Langoulant – Company secretary
(c) Key management personnel compensation
Short-Term
Post-employment
Share based payments expense
Consolidated
2014
$
173,758
16,553
-
2013
$
421,225
24,608
75,040
190,311
520,873
Detailed remuneration disclosures of directors and key management personnel are contained on pages 18 to 20 of this report.
(d) Option holdings of key management personnel
Details of options provided as remuneration, together with the terms and conditions of the shares and options can be found in
section D of the remuneration report.
43
Viking Mines Limited
ABN 38 126 200 280
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
Note 17: Key management personnel disclosures (cont)
(d) Option holdings of key management personnel (cont)
Details of options provided as remuneration, together with the terms and conditions of the shares and options can be found
in section D of the remuneration report. The following options were granted to directors subject to continuity of
employment vesting conditions.
Balance at the
beginning of
the financial
period
Granted during
the financial
period
Expired
during the
financial
period
Balance at the
end of the
financial
period
Vested and
exercisable at
the end of the
financial period
1,500,000
2,500,000
1,000,000
-
-
-
-
-
-
-
-
1,500,000
1,500,000
2,500,000
2,500,000
1,000,000
1,000,000
1,000,000
1,000,000
Other key management personnel
M Langoulant
1,000,000
2014
Name
Director
J Gardner
P McMickan
T Kroepelien
2013
Name
Director
J Gardner
P McMickan
T Kroepelien
Balance at
the
beginning of
the financial
period
Granted
during the
financial
period
Expired
during the
financial
period
Balance at
the end of
the financial
period
Vested and
exercisable at
the end of the
financial
period
1,500,000
1,500,000
(1,500,000)
1,500,000
1,500,000
2,500,000
2,500,000
(2,500,000)
2,500,000
2,500,000
1,000,000
1,000,000
(1,000,000)
1,000,000
1,000,000
M Newlands*
1,000,000
1,000,000
(1,000,000)
1,000,000
1,000,000
Other key management personnel
M Langoulant
-
1,000,000
-
1,000,000
1,000,000
* Resigned in December 2013.
44
Viking Mines Limited
ABN 38 126 200 280
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
(e) Equity holdings of key management personnel
The number of shares in the Company held during the financial period by each director of the Company and key
management personnel of the Group, including their personally related parties, are set out below
2014
Director -Ordinary shares
Balance at start of
year
Movement during
the year
Balance at the end of
the financial year
J Gardner
P McMickan
T Kroepelien
Key management personnel
M Langoulant
2013
Director - Ordinary shares
J Gardner
P McMickan
T Kroepelien
M Newlands*
Key management personnel
M Langoulant
7,527,594
3,026,837
4,060,000
2,960,049
20,000
(186,000)**
10,487,643
3,046,837
3,874,000
475,000
400,000
875,000
5,454,258
2,721,469
3,760,000
200,000
2,073,336
305,368
300,000
50,000
7,527,594
3,026,837
4,060,000
250,000
475,000
-
475,000
* Resigned in December 2013.
** Not a sale of shares but a change related to a mature child no longer deemed a related party holding.
45
Viking Mines Limited
ABN 38 126 200 280
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
Note 18: Related party disclosure
The ultimate parent entity in the wholly-owned group and the ultimate Australian parent entity is Viking Mines Limited. The
consolidated financial statements include the financial statements of Viking Mines Limited and the controlled entities listed in
the following table:
Name of entity
Country of
incorporation
Class of shares
Equity holding
Associated Goldfields Pty Ltd
Ghana Mining Investments Pty Ltd
Kiwi International Resources Pty Ltd
Abore Mining Company Ltd
Obenemase Gold Mines Ltd
Resolute Amansie Ltd
Kiwi Goldfields Ltd
Australia
Australia
Australia
Ghana
Ghana
Ghana
Ghana
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
2014
%
100
100
100
90
90
90
100
2013
%
100
100
100
90
90
90
100
The only transactions between Viking Mines Limited and its controlled entities during this financial year consisted of loans
between Viking Mines Limited and its controlled entities.
Related parties
The following table provides details of advances to related parties and outstanding
balances at balance date.
Parent entity
Resolute Amansie Ltd – opening balance
Advances made and foreign exchange movements
Resolute Amansie Ltd – closing balance
2014
$
8,285,990
(125,511)
8,160,479
2013
$
6,412,430
1,873,560
8,285,990
46
Viking Mines Limited
ABN 38 126 200 280
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
Note 19: Parent Entity Disclosures
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-Current liabilities
Total liabilities
Equity
Issued capital
Retained earnings
Reserves
Total equity
Financial performance
Loss for the year
Other comprehensive income
Total comprehensive profit /( loss)
Note 20: Events after the balance sheet date
30 June 2014
$
30 June 2013
$
529,880
3,003,516
244,722
3,004,493
3,533,396
3,249,215
545,828
-
545,828
120,978
-
120,978
16,852,732
(14,109,164)
244,000
16,142,797
(13,258,560)
244,000
2,987,568
3,128,237
30 June 2014
$
30 June 2013
$
(656,682)
-
(5,005,667)
-
(656,682)
(5,005,667)
There has not been any matter or circumstance that has arisen after balance date that has significantly affected, or may
significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future
financial periods other than:
On 18 August 2014 the Company lodged a prospectus to raise up to $3.04 million by the issue of up to 80 million
shares at an issue price of $0.038, together with a one for four free option exercisable at $0.09 at any time before 30
April 2017. On 25 August 2014 the Company announced that the minimum subscription level of $2.09 million had
been raised under this prospectus.
On 26 August 2014 the Company announced that its takeover offer for all the shares in Auminco was unconditional.
As at the date of this report Viking has received acceptances from 97.93% of Auminco shareholders. Auminco
shareholders have until 24 September 2014 to accept the Viking offer, after which Viking intends to compulsorily
acquire the remaining balance. At this point the $500,000 loan advanced by Viking to Auminco will be eliminated as
a consolidation adjustment.
47
Viking Mines Limited
ABN 38 126 200 280
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2014
Note 21: Reconciliation of loss after income tax to net cash outflow from operating activities
a) Reconciliation of loss from ordinary activities after income tax to
net cash outflow from operating activities
Net loss for the year
Outside equity interest in loss
Depreciation
Foreign exchange movements
Share based payments
Exploration and evaluation
Impairment of project acquisition costs
Proceeds from sale of PPE
(Increase) / decrease in trade and other receivables
Increase / (decrease) in trade payables and
provisions
Consolidated
2014
$
2013
$
(730,370)
(4,924,804)
(8,187)
8,361
(90,530)
-
126,445
-
(17,299)
(18,225)
115,948
(102,335)
22,622
21,398
85,760
966,602
3,373,110
-
10,727
(186,310)
Net cash outflow from operating activities
(613,857)
(733,230)
b) Non-cash financing and investing activities
There were nil non-cash financing and investing activities.
Note 21: Auditors’ remuneration
The auditors of the Group are Rothsay Chartered Accountants.
Assurance services
Rothsay Chartered Accountants:
Audit and review of financial statements
Other firms
Audit and review of financial statements
Total remuneration for audit services
Other services
Rothsay Chartered Accountants:
Other firms:
Total remuneration for other services
Consolidated
2014
$
16,500
-
16,500
-
-
-
2013
$
22,500
10,997
33,497
-
-
-
Total auditors’ remuneration
16,500
33,497
48
Viking Mines Limited
ABN 38 126 200 280
DIRECTORS’ DECLARATION
1.
In the opinion of the directors:
a.
the accompanying financial statements and notes are in accordance with the Corporations Act 2001 including:
i. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2014 and of its
performance for the financial year then ended; and
ii. complying with Accounting Standards and Corporations Regulations 2001; and
b.
c.
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
the financial statements and notes thereto are in accordance with International Financial Reporting Standards issued
by the International Accounting Standards Board.
2. This declaration has been made after receiving the declarations required to be made to the directors in accordance with
Section 295A of the Corporations Act 2001 for the year ended 30 June 2014.
This declaration is signed in accordance with a resolution of the Board of Directors.
Jack Gardner
Chairman
Perth, Western Australia
10 September 2014
49
Viking Mines Limited
ABN 80 091 415 968
ADDITIONAL INFORMATION
The shareholder information set out below was applicable as at 31 August 2014.
A. Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
1
1,001
10,001
100,001
1,000,001
1,000
10,000
100,000
1,000,000
and over
There were 130 holders of less than a marketable parcel of ordinary shares.
B. Equity security holders
Twenty largest quoted equity security holders – ordinary shares
Name
RESOLUTE MINING LTD
JAYTU PTY LT (JOHN WILLIAM GARDNER
SUPERANNUATION)
ASLAN EQUITIES PTY LTD
MANSON GROUP PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR TRYGVE KROEPELIEN
JP MORGAN NOMINEES AUSTRALIA LIMITED
MR PETER JAMES MCMICKAN & MRS CAROLYN VERA
MCMICKAN (MCMICKAN FAMILY S/FUND A/C)
MR STANLEY ROBERT SIMMONS & MRS THERESE
SIMMONS (SIMMONS FAMILY S/F A/C)
CORPORATE ADMIN RESOURCES PTY LTD
MR RODNEY ADLER
GOLDEN TIGER INVESTMENTS PTY LTD
MACQUARIE BANK LTD
AFTRON PTY LIMITED
DYLIDE PTY LTD
SLADE TECHNOLOGIES PTY LTD
MR PETER WATSON & MR DAVID WATSON
VEBLEN GROUP PTY LIMITED (JCL A/C)
666 PTY LTD
MS CAROLYN MCMICKAN
Class of equity security
Ordinary shares
12
114
187
84
15
412
No. held % of issued
shares
31,607,143
10,477,643
5,714,286
5,026,867
4,441,441
3,874,000
3,315,245
2,250,000
2,144,502
1,553,303
1,428,571
1,428,571
1,277,672
1,150,000
1,000,000
917,500
900,000
850,000
739,499
720,000
28.05
9.30
5.07
4.46
3.94
3.44
2.94
2.00
1.90
1.38
1.27
1.27
1.13
1.02
0.89
0.81
0.80
0.75
0.66
0.64
80,816,243
71.72
52
Viking Mines Limited
ABN 80 091 415 968
ADDITIONAL INFORMATION
C. Substantial shareholders
Substantial shareholders in the Company are set out below:
Ordinary shares
Resolute Group Ltd
Jaytu Pty Ltd ATF (John William Gardner Superannuation)
Number
Held
Percentage
28,750,000
10,477,643
28.05
9.30
D. Voting rights
The voting rights attaching to each class of equity securities are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll
each share shall have one vote.
E. Tenement schedule
Licence name
Location
Licence type
Licence Holder/ JV
Partners
Viking Mines
Ownership
Akoase West
Akoase East
Blue River
West Star(1)
West Star (2)
Akoase South-
East
southern
Ghana
southern
Ghana
southern
Ghana
southern
Ghana
southern
Ghana
southern
Ghana
Prospecting
licence
Prospecting
licence
RAL
RAL
100%
100%
Mining lease
BRMCL/RAL
100% hardrock
Prospecting
licence
WMCL/RAL
100% hardrock
Mining lease
WMCL/RAL
100% hardrock
Prospecting
licence
RAL
100%
RAL = Resolute Amansie Ltd a 100% owned subsidiary of Viking Ashanti Ltd
BRMCL = Blue River Mining Company Ltd., WMCL = West Star Mining Company Ltd, both joint venture
partners
53